Independent directors of Tourism Holdings are recommending that shareholders reject a takeover offer, as it undervalues the company.
Ballylinch, which has a stake of 19% in the tourism operator and campervan rental company, is offering 67.5 cents per share to boost its stake by another 41% and gain majority control.
But the offer price is well below the valuation range of 97 cents - $1.27 determined by Simmons Corporate Finance.
In an appraisal report, Simmons Corporate Finance say the offer came at a time when Tourism Holdings performance was affected by the global financial crisis, the high New Zealand and Australian dollars, and a series of natural disasters and there's no compelling reason to accept the offer.
THL independent directors are urging shareholders not to accept the deal, but they say they will see if Ballylinch is prepared to increase its offer.
Tourism Holdings shares have risen 1c to 73c.